January 16th 2012. Canadian consumer bankruptcies decreased15.0% while consumer proposals increased by 7.4 % for period ending Oct 31st 2011. Proportion of proposals increased to 35.8% up from 30.6 % during the year ending October 31st, 2010. Link here to Office of Superintendent of Bankruptcy Statistics

 

Household net worth down, national net worth up

 

The ratio of household credit market debt, which includes mortgages, consumer credit and loans, to disposable income rose to 149 percent from 147 percent in the previous quarter.  Policy makers have warned Canadians against taking on too much debt, especially as interest rates can only go up over time and some may find themselves unable to afford their debt payments.

 

The Bank of Canada warned earlier this year that the number of Canadians who were vulnerable to an adverse economic shock had risen to its highest level in nine years.   Despite an increase in home prices, household net worth declined 0.3 percent in the second quarter, Statscan said, because of a drop in prices of shares held by households, including pension assets. Per capita household net worth fell for the first time in a year to C$184,300 from C$185,500 in the first quarter. 

 

Government net debt and corporate debt-to-equity both rose in the second quarter compared with the first. National net worth -- which includes households, corporations, governments and nonresidents -- rose 1.2 percent to C$6.4 trillion, with residential real estate accounting for over half of the gain.

 

 

TORONTO, Sept. 8, 2011 /CNW/ - For many Canadians, the 'golden years' are now a more distant dream. They are struggling to save for retirement and to make ends meet.

 

According to the third annual survey of employees conducted by the Canadian Payroll Association (CPA), 40% of Canadians said they now expect to retire later than they previously planned. The primary reason (cited by 40%) was "I'm not saving enough money for retirement."

 

A major contributing factor to the low savings rate is that many Canadians are living close to the line. The CPA survey found that the majority of Canadian workers continue to live pay cheque to pay cheque, with 57% saying they would be in financial difficulty if their pay was delayed by even a week.

 

The numbers were even higher for younger Canadians aged 18 to 34 (63%) and single parents (74%). The regions with the highest percentage of workers living pay cheque to pay cheque were Ontario (60%) and the Atlantic provinces (64%), which may be the result of their slower recovery since the last recession.

 

Financial planners generally recommend that people have approximately three months of expenses (rent, mortgage, bills, groceries, etc.) as an emergency fund. Read the full survey results here

 

Ottawa, August 29th, 2011

 

New mortgage rules implemented this past spring have stemmed the flow of new buyers and put a chill on refinancing activity, the agency that insures Canada's housing market says. The Canada Mortgage and Housing Corporation (CMHC)  issued its second quarter results on Monday, and the numbers paint a picture of a housing market in flux.

 

In March, Finance Minister Jim Flaherty unveiled the latest round of tweaks to Canadian mortgage rules designed to make it harder for Canadians to bite off more debt than they can withstand.

 

Lenders typically require mortgage insurance for loans made to anyone who wants to buy a home with a down payment of less than 20 per cent of the purchase price. And the Canadian Bank Act prohibits most federally regulated lending institutions from insuring more than 80 per cent of the value of a home. Some do, but the CMHC is the ultimate backstopper of most highly-leveraged home loans.

 

The two main rule changes implemented in March were a reduction of the maximum amortization time to 30 years from 35, and a reduction in the maximum amount a homeowner is allowed to refinance — to 85 per cent of the value of the home, down from 90.

 

By the end of June, the impacts of those rules were already being felt, with the CMHC seeing an instant 10 per cent reduction in the number of mortgage insurance applications. That figure rebounded somewhat, but by the end of June, it was still five per cent below the level it was prior to the changes. The move to 30-year amortizations was expected to somewhat reduce the number of new buyers. But the refinancing change has had a much more significant impact.

 

At the end of June, refinancings were down by 40 per cent, CMHC said Monday.The agency has only recently started posting its quarterly results, because of changes to Ottawa's Financial Administration Act, which were laid out at the same time as the new mortgage rules came into play.

 

Despite the slowdown in new applicants, the total value of CMHC's loan portfolio was $536 billion at the end of June, a 9 per cent increase from $490 billion at the same point last year.

 

The CMHC has made it almost impossible to get a mortgage of more than 30 years, but it's interesting to note that the average amortization period actually crept slightly higher in the first six months of the year. The average CMHC-insured mortgage had an amortization period of 24.6 years at the end of June; it was 23.9 during the same period in 2010. And the average outstanding loan amount on a Canadian mortgage was $158,894 at the end of June, CMHC says.

 

The agency saw little change in the number of people falling behind on their mortgage payments. CMHC views any home loan more than 90 days late on payment as being in arrears, and the mortgage arrears rate was steady at 0.4 per cent of all homeowners at the end of June. That figure has remained steady since May 2010, the CMHC said. Read the full report here

 

 

About 72 per cent of Canadians say they're holding some form of debt, according to a new poll by CIBC. The bank found that of those debtholders, four in 10 say their current debt level is an obstacle to reaching future financial goals.

 

Canadians are taking steps to tackle their debt loads, but most aren’t seeking financial advice on this important part of their financial plan, a new CIBC poll shows. Of those in debt, 61% say they’ve made good progress towards paying down their debt so far this year. Efforts include making lump sum payments towards their debt, instituting a household budget and making sacrifices in order to better manage their debt.

“Managing debt as part of their overall financial plan is top of mind for Canadians in 2011, and these latest poll results show that some progress is being made,” commented Christina Kramer, executive vice president of retail distribution and channel strategy at CIBC.Despite this progress, however, 42% of Canadians owing money said they still see their debt as an obstacle to achieving their long-term financial goals.

And, they may not be using all available options to help them become debt-free sooner. Among Canadians with debt, only 21% have had a conversation with an advisor sometime in the last year about strategies to reduce their debt faster.

“Canadians often associate getting financial advice with topics like saving for retirement and investing, but they should also think about making debt reduction part of a broader conversation with an advisor about their overall finances,” said Kramer.

She said advisors should help clients review their overall interest costs and help determine how best to allocate their money towards their debt.

Individuals aged 35 to 44 are most likely to hold various forms of debt, with 89% of those in this age group reporting that they hold at least some debt. Canadians aged 18 to 24 and those 65 and up were least likely to hold debt, according to the poll.

Link to CIBC poll press release http://cnwtelbec.com/en/releases/archive/August2011/08/c9505.html

 

TORONTO, July 14, 2011

 

Canada's household credit is on pace to grow at its slowest rate in a decade, according to a new report released by CIBC Economics. They  estimate that Canadians will add approximately four per cent to their outstanding debt — all from new mortgages — in 2011.

If correct, that would be smallest rise in personal borrowings since 2002, according to CIBC economist Benjamin Tal and the author of the report. "In fact, inflation-adjusted non-mortgage consumer credit is now rising at the slowest pace since the early 1990s," Tal wrote.
That trend would be welcome news for the Bank of Canada. In the recent past, Bank Governor Mark Carney has publicly warned Canadians about the threat from building up too much individual debt, especially if interest rates rise late in 2011 to reduce inflation.

 

Tal calculated that the slowdown in national consumer credit has been driven by Canadians opening fewer lines of credit, up only six per cent. That is the smallest increase on record.

 

As well, growth in outstanding credit cards has been minimal, Tal reported, up less than one per cent in the year. Here, new limits imposed on borrowers by the card companies have crimped any debt increase in this area.

 

The one growth area — home mortgages — is where accumulated debt is rising at a 1.8 per cent clip, or twice as fast as individual income growth, which stood at 0.9 per cent during the same period.

 

But, rising mortgage debt was mitigated by the concurrent rise in the value of assets held by Canadians, according to the CIBC.That means the worth of an individual's house and that person's stock and bond portfolio is increasing at approximately the same pace as his or her mortgage debt is growing. "While debt is still rising faster than income, it is not rising faster than assets. The net worth position of Canadians has improved in the first quarter in absolute terms and relative to income," Tal said.

 

Access the full report by CIBC here.

 

Credit Card vs. Line of Credit: What Do You Know and How Much Do You Owe, Canada?

 

TORONTO, June 29, 2011 /CNW/ - Scotiabank today released the results of a recent poll looking at consumer debt levels and practices, and how Canadians are feeling about their debt.

 

The study was conducted by Harris/Decima and assessed the borrowing habits of Canadians. More than half of Canadians (56 per cent) feel their level of debt is manageable and an additional 27 per cent do not have any debt. A smaller number of Canadians (17 per cent) reported feeling overwhelmed by their debt, and many of these people carry a credit card or line of credit balance.

 

"We know that a majority of Canadians are interested in having a plan that looks at their overall financial health and helps them make the most of their money," said Mike Henry, Senior Vice-President of Retail Payments, Deposits, and Lending at Scotiabank. "Whether it's renovating their home, funding a child's education, or planning for retirement, having a financial plan with a manageable borrowing strategy will help Canadians plan for and manage the role that debt plays in reaching their life and financial goals."

 

Many Canadians do not currently have an outstanding balance on their credit card or on their line of credit (56 per cent and 40 per cent respectively). In fact, four-in-ten (41 per cent) respondents never carry a balance on their credit card and one-third (31 per cent) never carry a balance on their line of credit. An additional one-in-five only use their credit card or line of credit (18 per cent and 22 per cent respectively) in the case of an emergency.

 

Other findings indicate that more than one-third of Canadians (36 per cent) currently have an outstanding balance on their credit card and an almost equal number (32 per cent) are in the same position with their line of credit. These individuals currently have an average outstanding balance of $6,938 on their credit card and $28,753 on their line of credit.

 

"Our research also tells us that while there is a desire among Canadians to become debt free, 40 per cent of Canadians do not have a plan to manage their borrowing needs," said Mr. Henry. "We encourage Canadians to talk to our employees in branches across the country so that we can put our planning expertise to work and help them create manageable and sustainable financial plans that meet their individual needs."

 

Canadians are also quite knowledgeable about the differences between a credit card and a line of credit, with the majority knowing that both can be paid back at any time (62 per cent), that a credit card often offers loyalty rewards (88 per cent) and that a line of credit usually has a lower interest rate (81 per cent) and higher credit limit (57 per cent).

 

"Having a solid understanding of the differences between a credit card and a line of credit helps people use each tool wisely so these results are very encouraging," said Mr. Henry. "Credit cards and lines of credit serve a different purpose and as with any financial tool, we want to make sure that our customers are using the right product for their needs."

 

The Scotiabank Borrowing Poll was conducted online using Harris/Decima's online panel. A total of 1,003 Canadians were surveyed from March 11th, 2011 to March 21st, 2011. Surveys were conducted among a random sample of panel members across Canada.

 

Record High Debt to  Income Ratios and Net Worth : Stats Canada

Canada Newswire-June 20th, 2010

 

 

 

Toronto, June 14th, 2011

 

Canadian households are currently sitting on top of a record mountain of debt and have only recently begun to repair their balance sheets, according to a new report by Certified General Accountants Association of Canada. The report warns that households are not doing enough to alter their spending habits, and the accumulation of debt payments has offset any pullback in overall indebtedness.

The debt-to-income ratio sat at a record level of 146.9 percent in the first quarter of 2011 -- though recent data shows households are taming their appetite for debt, with the pace of debt expansion falling in 2010 and 2011 to levels prevailing in the 1990s.

"However, the signs of improving household balance sheet have not yet emerged even though the growth in debt is moderating," the report says. "As such, we believe that the dynamic of household indebtedness should remain high on the radar of policy-makers."

Canadian households currently hold a record $1.5 trillion in debt, the report says. If that were spread out among each individual it would come to $44,115 and $176,461 for a family of four.

The report also raises concerns about Canadians’ perception of their debt levels versus reality, as many households surveyed think their balance sheets are improving. This divergence may cause problems for policy makers as interest rates get set to rise.

WHAT WE SPEND ON

The biggest contributor to the run-up in debt levels is consumption, not "asset accumulation" such as home purchases. Almost 60 percent of indebted respondents said day-to-day living expenses are the main cause for the increasing debt, compared to just 19 percent who said their debt increased for "wealth-generating" outlays such as a home or education.

The biggest contributor to the slowdown in debt accumulation in 2010 was a pullback in personal lines of credit, according to the report. But Canadians are also holding less equity in their homes.

The reports says the ratio of mortgage-to-residential assets rose to 65.7 percent at the end of 2010 from 55 percent observed between 1990 and 2007.

The Certified General Accountants Association of Canada report comes on the heel of repeated warnings from the Bank of Canada about high household debt levels and pending interest rate hikes. In an interview with BNN, Bank of Canada governor Mark Carney warned that long periods of low interest rates can cloud people's assessment of financial risk. Around the same time, the BoC said high debt levels-mixed with troubles overseas-meant that risks to the Canadian economy remain "elevated."

Another report by TD Economics warned that while Canadian households are trying to kick the borrowing habit and repair their balance they aren't cutting borrowing fast enough and the Canadian consumer is not likely to be the main engine of economic growth in the future.

 

Highlight and full report are available on CGA Canada's web site here

 

The CBC posted a story June 3rd, 2011 warning Canadians to be very careful regarding dealing with US-based debt settlement firms. In our opinion the are nothing short of a scam and in the US the Federal Trade Commission has banned any kind of upfront fees being required for Debt Settlement services since October 2010 Watch a CBC video and story here.

 

Canadian Press, June 1, 2011 

 

Canadians' average non-mortgage debt grew 4.5 per cent to $25,597 in the first quarter compared to a year earlier, signalling that consumers aren't necessarily clamping down on borrowing even as they rein in spending.

 

Total debt per consumer, including credit cards, car loans and lines of credit but excluding mortgages, was up from $24,497 in the same quarter of 2010, according to a quarterly analysis by TransUnion. Total consumer debt rose in all provinces but increased the most in Quebec and Newfoundland and Labrador, with debt rising by 7.8 per cent in both provinces, while British Columbians had the highest average consumer debt at $36,649.

 

"Our first quarter data shows a continued increase in the total debt per consumer, although the trend still remains modest compared to the double-digit, pre-recession levels," said Thomas Higgins, TransUnion's vice president of analytics and decisioning.

 

Average credit card debt -- which is often the most expensive because of high interest rates -- fell four per cent to $3,539 from $3,688 in the fourth quarter, when Canadian spending ramped up for the holiday shopping period, and remained stabled compared with the first quarter of 2010. But in a sign of troubled credit health, the national credit card delinquency rate -- the ratio of credit card accounts that are 90 days or more overdue -- grew 11 per cent from the first quarter of 2010.

 

The average borrower debt on auto loans was also up in the quarter -- by 12.4 per cent to $16,189 from $14,402 in the first quarter of 2010. The delinquency rate on auto loans fell slightly to 0.1 per cent from 0.13 per cent a year ago.

 

Lines of credit are the most popular form of consumer debt, excluding mortgages, accounting for more than 41 per cent of outstanding debt at the end of the first quarter. Debt on lines of credit stood at an average $33,981, up 5.9 per cent from $31,867 in the first quarter of 2010.

 

There have been warnings, including from Canada's top central banker, that consumers should take care to rein in their borrowing -- which has pushed up individual debt levels since the 2008-09 recession and subsequent recovery.

 

Data released earlier this week (see post below)  showed that consumer spending slowed during the first quarter, to just 0.1 per cent growth. The slowdown in spending has lead some observers to believe consumers are focused on consolidating debt after borrowing heavily during the recession.

Major Canadian banks noted during their latest quarterly reports that they've seen a slow down in Canadian borrowing, though their figures include mortgages, a market that is dropping off as the housing market cools.

Finance Minister Jim Flaherty said Tuesday he's not concerned about a slowdown in consumer spending, as it suggests Canadians are heeding official warnings about spending beyond one's means.

 

However, the weakness in consumer spending also reflects the fact that higher energy and particularly gasoline prices are taking a bigger bite out of household budgets, leaving less for other forms of expenditures. That, combined with high levels of indebtedness are expected to weigh down purchases going forward.

 

The analysis is based on anonymous credit files of all credit-active Canadians.

 

May 31st, 2011

 

After gorging on debt in recent years, Canadian households are trying to kick the borrowing habit and repair their balance sheets as interest rates get set to rise in the coming months, according to a new report from TD Economics. But the report warns that households aren’t cutting borrowing fast enough and the Canadian consumer is not likely to be the main engine of economic growth in the future.

“While households are clearly putting the brakes on debt accumulation in the wake of record debt levels, they are not deleveraging,” the economists argue. “Households are still net borrowers, meaning they borrow more than they save.”

According to the report disposable income growth is likely to be in the range of 4.0 to 4.5 percent, while credit continues to grow at a pace that’s two percentage points higher.

The report also warns that after nearly ten years of taking on higher levels of debt, many households are likely to face headwinds as interest rates inevitably rise.

“Not only does the sheer level of debt leave Canadian households more sensitive to the future rise in interest rates, but households have been carrying a greater share of variable rate debt instruments,” the economists write. “As of the first quarter of 2011, over 46 percent of household debt is tied to a variable rate product, up from 30 percent at the start of 2009.”

 

But the authors also point out the keeping interest rates too low for too long is a dangerous policy. “The worst scenario would be one where interest rates are left too low for too long, which necessitates a more rapid tightening of monetary policy that would pose a greater shock to personal finances.”

 

Read the report here

 

May 25th, 2011
 
According to the latest research from Investors Group, a majority of Canadians who are in debt say they believe it will have a positive future impact on their life.
 
Of the 75 per cent of Canadians who say they are in debt, more than half (54 per cent) point to purchasing property as the main reason. Another 37 per cent have used debt to invest in home renovations. Nearly one-in-four (28 per cent) have gone into debt to make a financial investment and 18 per cent have taken on debt to invest in themselves for skills upgrading or going back to school.
 
But there's also a far less positive side to the Canadian personal debt picture. While being in debt may be the new 'norm', 58 per cent of Canadians with debt feel uncomfortable even though they acknowledge they can live with it. Thirty-per cent are outright embarrassed by it. One-in-three Canadians with debt (33 per cent) admit to losing sleep over their debt load and 25 per cent say debt talk has triggered disagreements with their partners.
 
"The reality is that almost everyone has consumer debt," says Jack Courtney, Assistant Vice President, Advanced Financial Planning of Investors Group. "But accumulating debt with purpose and putting thought into how debt will be repaid is very different than spending beyond one's means and without foresight."
 

The majority of Canadians with debt (73 per cent) say they have some idea about how they will pay what they owe. When asked for details, thirty-five per cent said they simply plan to curb their spending. One in four Canadians with debt (27 per cent) are considering more drastic steps. Fourteen per cent are considering delaying retirement and working to pay down their debt while 13 per cent plan to make more money by working at more than one job.
 
Paying off consumer debt such as credit cards is the greatest priority for 57 per cent of Canadians with debt. Paying off their mortgage is the primary objective for 25 per cent while 18 per cent are focused on paying off personal loans.
 
When it comes to making a major purchase, most Canadians say they either pay entirely in cash (33 per cent) or as much as they can in cash (41 per cent). Another 13 per cent check their monthly budget to ensure they can cover the minimum payment required but a similar number (13 per cent) say they just make the purchase without worrying about how they will pay for it.

"While debt financing can be helpful in purchasing a home or funding education, debt can also have very negative impacts on Canadians' ability to save and invest," Courtney says. "A financial advisor can help develop a long term financial plan that includes managing, reducing and ultimately eliminating personal debt."
 
The pulse of Canadians' debt
-58 per cent of all Canadians feel they are in great financial shape and only one-third (31 per cent) would go back and do things differently if they could.
54 per cent of Canadians with debt say their personal and household total debt has decreased in the past year; twenty per cent say there's been no change.
-66 per cent of Canadians say day-to-day living expenses are contributing to their debt load. Three-in-ten cite travel and vacation costs while nearly a quarter (23 per cent) point to entertainment and recreation.
-31 per cent say their debt makes them feel as though they have achieved acceptable financial status because they are considered credit worthy.
-40 per cent of Canadians think they have less debt than their friends while only 19 per cent think they have more.
-15 per cent of those in debt say it is the result of bad budgeting and overspending and eight per cent say they believe they will never climb out of debt.
 
These data were collected through an online panel survey between April 27 and May 8, 2011.  In total, 1,020 surveys were completed nationally.  Online panel surveys are non-probability samples and thus margin of error cannot be calculated.  However, stratified sampling and weighting was done to bring the sample in line with Census profile.

 

May 24th, 2011

 

Canadians are brimming with optimism about the state of the economy but they’re poised to cut their spending after two years of wracking up debt through the Great Recession, a new report has found. Canadians ranked second in overall outlook about the economy – and have a much sunnier perspective than the Americans, according to a report from the Boston Consulting released Tuesday.

 

Just over half of Canadians surveyed believe that the worst of the economic downturn has passed.But Canadians will remain conservative over the next year – with 90 per cent reporting they will spend the same or less compared to last year. Nearly half – 44 per cent – plan to decrease their spending. They’re also among the most likely in the world to “buy on a deal,” the report said. “While Canadians feel optimistic about the state of the economy relative to their global peers, they also feel personally burdened and anxious about the record level of debt that was accumulated through the downturn,” said Cliff Grevler, a Partner and Managing Director in the Toronto office of BCG.

 

At first glance, the positive outlook may seem at odds with a rush to trim the household budget, but it makes sense given that Canadians spent their way through the recession, Grevler said. Over the past two years Canada’s economy has done very well. Employment has returned to pre-crisis levels, the GDP has recovered more quickly than those of other major world economies. As well, interest rates and inflation rates are at all time lows.

That’s largely because Canadians kept spending through the recession – mostly by taking advantage of record low interest rates and piling on debt. That kept the economy going strong, but now, household debt has reached record levels. “That’s causing people to get a bit concerned and start cutting back,” Grevler said.

 

The report found that the average Canadian credit card debt was $4,600 in 2010, up 10 per cent from $4,200 in 2008. Last year, 62 per cent of Canadians reported paying off their balance in full each month. That’s down from 73 per cent in 2008.

 

More Canadians are also using credit for basic necessities, and about 15 per cent of mortgage holders say they could not sustain a rise in interest rates of 2 per cent or less, the report found. That translates to about 850,000 households.

 

“I don’t think the Canadian economy is at risk,” Grevler said. “Canada has been much more conservative than the U.S. from a regulatory and consumer standpoint. Consumers in both countries are increasingly frugal. Canadians are scaling back even more. I think that speaks to the conservative nature of Canadians.”

 

The survey is based on an annual global survey of consumer attitudes and behaviour. The survey was conducted in April and involved 20,000 consumers in 20 countries. Americans' personal savings rate rose by 4.2 points between the pre-crisis low and the end of 2010; Canadians' savings rate only grew by 2.3 points during that period.

 

But Canadians’ financial picture has been much more sound through the recession. For instance, average U.S. credit card debt stood at $6,700 in 2010, down 18 per cent from $8,200 in 2008. In 2008, only 50 per cent of U.S. households paid off their credit card balance each month. That rose to 54 per cent in 2010.

 

The report also found that four out of five Canadians think they’re better off than Americans. Two-thirds think they’re better off than Europeans. Turkey ranked first with 54 per cent and the U.S. trailed at one-third expressing optimism. Three-quarters of Canadian consumers report spending more time shopping around for better prices. Another three-quarters report buying "fewer things" over the past 12 months, the report said. Eighty-six per cent of Canadian consumers report to have bought more often “on deal” over the last 12 months. Canada ranks second only to Italy in deal-hunting. More Canadians also said they plan to cut spending on non-essential items and defer major expenses, compared to two years ago.

 

May 9th, 2011

 

Years of experience give older homeowners a more realistic perspective on debt Monday, May 9th, 2011. Young homeowners are overly optimistic about when they’ll be debt-free, suggest the results of a recent survey conducted for Manulife Bank of Canada released May 9th.

 

According to the survey, more than four out of 10 Canadian homeowners aged 30-39 expect to be debt-free by the end of their 40s and another third expect to be debt-free in their 50s. However, the survey found that only seven per cent of homeowners aged 40-49 and 16% aged 50-59 have actually paid off all their debts.

 

“When people buy their first home, they have the best of intentions to pay off their mortgage and other loans, and are optimistic about their financial future,” says Doug Conick, president and CEO of Manulife Bank. “However, even carefully laid financial plans can be thrown off track by unexpected life expenses, such as home repairs, family illness, or job loss. Debt-freedom is possible, but it requires a commitment to financial discipline, and for many people, some professional advice on how to plan finances for the long term.”

 

The survey found that people often use their extra cash for things other than debt repayment, even when they know they should pay down that loan. When respondents were asked what they would do with an unexpected windfall, they identified debt repayment as a priority by a significant margin — an average of 51% of the hypothetical windfall was allocated to debt repayment. But when they were asked what they actually did with the money the last time they were in that situation, debt repayment remained the top priority, but the amount allocated to debt dropped to 39%, while money allocated to day-to-day expenses rose significantly.

 

The average homeowner aged 30-39 has $209,200 in debt of all kinds according to the latest quarterly survey results. By comparison, those in their 50s still have $108,500 of debt on average, or just over half as much.

 

The survey data shows that 19% of homeowners in their 50s actually increased their debt in the past 12 months, while only 33% reduced their debt by as much as or more than they had expected. In fact, 20% of homeowners aged 50-59 either couldn’t foresee when they would be debt free, or don’t expect to ever reach that point, while 44% expect to carry debt into their 60s.

Nonetheless, homeowners in their 50s are happier with the amount of debt they currently have than those in their 30s and 40s, reflecting perhaps both the progress they have made in reducing their debt, and their perceived ability to repay that debt.

 

Overall, 57% of respondents report reducing their debt over the last 12 month, up eight points from 49% in November 2010. Additionally, nearly seven in 10 respondents rank being debt-free among their top financial priorities, a relatively consistent finding over the past five quarterly surveys.

 

Other findings from the survey:

> 71% of those in their 50s manage their debt and day-to-day finances with no outside advice, compared with 63% for the 40-49 age group and 57% for the 30-39 group

> one third of respondents believe their knowledge of personal debt management to be “above” or “well-above average”, compared with just 10% who characterize their knowledge as “below average” or “well-below average”

> those 30-39 have 3.8 separate loans outstanding, compared with 3.1 for those in their 40s, and 2.7 for the 50-59-year-olds.

 

The poll surveyed 1,000 Canadian homeowners between ages 30 to 59 with household income of more than $50,000. It was conducted online by Research House between March 22 and April 4, 2011.

 

April 21st, 2011

 

 

You can read the full report from Statistics Canada here.

 

 

April 12, 2011— Steeper gas and food prices are significantly impacting Canadians and their budgets, according to 45 per cent of the Canadians surveyed by the quarterly RBC Canadian Consumer Outlook Index (RBC CCO). These rising costs were registering highest among those living in Ontario (51 per cent), Atlantic Canada (49 per cent) and Quebec (48 per cent).

 

As an overall financial focus for the year, managing debt remains top of mind for consumers across the country, with 39 per cent planning to pay off their debt as much as possible, 30 per cent focused on spending less, 23 per cent looking to save or invest more and 25 per cent saying they intend to do all of these.

 

"Being able to save depends on effectively handling your expenses, so it's good to see Canadians are focused on managing their debt, expenses and savings," said Dave McKay, group head, Canadian Banking. "We're focused on helping every client find the right balance between taking on debt and growing their savings, based on their needs today and in the future."

 

The quarterly RBC CCO takes the pulse of Canadians on a number of topics, including consumer outlook for three key indices: national economy, personal financial situation and job anxiety. Over the next year and compared to the last quarter, 42 per cent of respondents feel the Canadian economy will improve (down one per cent); 39 per cent feel their own personal financial situation will improve (up one per cent); and 22 per cent are worried about job loss or being laid off (up two per cent).

 

Countering concerns about employment, the most recent Economic Outlook issued by RBC Economics in March 2011 forecast that labour market conditions will remain firm throughout the year. This report also noted that disposable income is expected to post a 4.1 per cent gain across the country.

 

"The gain in disposable income, alongside an improving labour market, will provide continued support to consumer spending and will lead to an eventual levelling out in consumer debt relative to income," said Craig Wright, senior vice-president and chief economist, RBC. "Debt levels are expected to increase more slowly, given a moderation in the housing sector, rising interest rates and efforts by consumers to rein in debt burdens."

 

The RBC CCO is Canada's most comprehensive consumer assessment of the economy, personal financial situation and economic and purchasing expectations. Other highlights from the RBC CCO include:

 

RBC Canadian Consumer Outlook Index: Overall, the RBC CCO Index has risen to 96 points from 93 in January 2011.

 

National Economic Outlook: While 42 per cent of Canadians feel the economy will improve over the next year, this sentiment is even stronger in several regions, including Alberta (50 per cent), B.C. (46 per cent), Saskatchewan/Manitoba (45 per cent) and Ontario (44 per cent). As for the current state of the economy, 61 per cent of Canadians describe it as "good", compared to 75 per cent of Prairie residents in Saskatchewan/Manitoba, 69 per cent of Albertans, and 63 per cent of residents of B.C.

 

Personal Financial Situation Outlook: The number of Canadians who generally feel that their personal financial situation will improve over the next year increased by one percentage point to 39 per cent since January 2010. This view is held most strongly in Alberta (45 per cent), Quebec (43 per cent) and Saskatchewan/Manitoba (40 per cent).

 

Job Anxiety Outlook: Nationally, job anxiety has increased by two percentage points to 22 per cent. At 28 per cent, residents of Ontario are expressing the most concern about the outlook for job loss or layoffs in the upcoming year, followed by people living in Quebec and Atlantic Canada (21 per cent each). Prairie residents in Saskatchewan/Manitoba are the least anxious about jobs (16 per cent).

 

Related regional releases and comparative data charts can be accessed via www.rbc.com/newsroom.

 

March 18th, 2011

 

 

Toronto, March 1 , 2011/CNW

 

Higher interest rates, tighter mortgage rules, an aging population & reduced affordability are risks to housing this year according to a report released today by Scotiabank. In a presentation moderated by Scotiabank's Managing Director of Real Estate Secured Lending, David Stafford, Scotiabank's Chief Economist Warren Jestin and Senior Economist and real estate specialist Adrienne Warren were joined by Phil Soper President & CEO of Brookfield Real Estate Services to share their views on what 2011 has in store for the Canadian economy and the Canadian real estate market.